In 2015 Rob DeDominicis was appointed CEO of GBST Holdings Limited (ASX:GBT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Rob DeDominicis’s Compensation Compare With Similar Sized Companies?
According to our data, GBST Holdings Limited has a market capitalization of AU$92m, and pays its CEO total annual compensation worth AU$623k. (This is based on the year to 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$582k. We took a group of companies with market capitalizations below AU$282m, and calculated the median CEO compensation to be AU$366k.
Thus we can conclude that Rob DeDominicis receives more in total compensation than the median of a group of companies in the same market, and of similar size to GBST Holdings Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. So this free visual report on analyst forecasts could hold they key to an excellent investment decision.
You can see a visual representation of the CEO compensation at GBST Holdings, below.
Is GBST Holdings Limited Growing?
Over the last three years GBST Holdings Limited has shrunk its earnings per share by an average of 32% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has GBST Holdings Limited Been A Good Investment?
Given the total loss of 67% over three years, many shareholders in GBST Holdings Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at GBST Holdings Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling GBST Holdings shares (free trial).
Important note: GBST Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.